In 2024, African countries paid an average of $9 in interest for every $100 borrowed on international markets. The African Union-backed Africa Credit Ratings Agency is preparing to challenge the global firms whose assessments shape borrowing costs. Emerging markets in Asia paid about $4.70 per $100, while Latin America paid $6.50, according to estimates by the Organisation for Economic Co-operation and Development.
AfCRA launches Wednesday, Oct. 7, 2026, after nearly a decade of talks. It will assess the creditworthiness of countries, businesses and institutions. Mauritius will host the agency, partly because of its established financial services industry.
The cost of a rating
A low rating costs borrowers: investors charge higher interest to lend. AfCRA aims to offer an alternative to Fitch, Moody's and S&P, known as the “big three” global credit rating agencies. Critics have accused those firms of unfairly playing down African economies.
The African Peer Review Mechanism, which established AfCRA, says traditional agencies don't rate 23 countries on the continent. Analysts also say conventional agencies can miss Africa's large informal sectors, which don't easily show up in official data. Their assessments feed into the terms on which countries borrow.
“Africa is not asking for favourable ratings,” Nigeria's President Bola Tinubu wrote on X last month, welcoming AfCRA. “We are asking for fair ratings, grounded in our fundamentals and in the reforms our economies are actually carrying out.” His statement frames the dispute around how African economies are measured. The borrowing figures show the financial cost attached to those assessments.
Independence under scrutiny
AfCRA's founders say governments won't interfere. Whether investors trust its ratings over those of leading agencies remains unsettled. Analysts say the agency's first test will come if it downgrades an African government; without that, investors could see it as the continent marking its own homework.
“African borrowers have long paid a high-risk premium, and standard models can miss the informal economy, domestic savings and reforms,” said Jacob Oreki, a management consultant at Kenya's Strathmore University Foundation. “But a rating agency is judged on independence and accuracy, not where it sits. If it won't downgrade an African sovereign, markets will treat it as advocacy,” he told AFP. Investors will base decisions on its ratings, he added, if “it is credible, not because it is African.”
Hannah Wanjie Ryder, chief executive of consultancy Development Reimagined, said at a recent seminar organised by the Chatham House think tank that AfCRA “is not just a response to 'Africa's unhappiness with the incumbent players'.” “The theory of change is they would actually be able to look with clearer eyes,” she said.
A challenge with limits
Bright Simons, founder of mPedigree in Ghana, wrote in a commentary published Oct. 7, 2026, that Africa's fight against mispriced risk is a good one but “can't be fought with blunt instruments.” The commentary said anger at rating agencies is among the causes that unite Africa's finance ministers, bankers and pan-Africanists.
Nigeria's President Bola Tinubu took up the issue in February, a year after Kenya's William Ruto declared that Africa would “no longer accept to be misjudged.” The UNDP estimated, counterfactually, that subjective judgment in African sovereign ratings may have cost more than $24 billion. AfCRA offers an institutional alternative, but investors must still find its judgments independent and accurate.